Tax reconciliation payrolls and debits

As each payroll is processed, we debit the required payroll taxes that apply—we then pay and file taxes and forms.

If adjustments are made that affect the amount of taxes owed (after payrolls have already processed, or forms filed), you may be liable to pay more to federal or state agencies.

To properly account for the changes and calculate tax differences, we run a “tax reconciliation” payroll. When these types of payrolls are processed, you may see that:

If your company has multiple bank accounts set up, we'll debit or credit the 'default' bank account on file.

Tax reconciliation payrolls make sure the correct tax amounts have been paid and reported to each agency.

Tax reconciliation causes

Some tax reconciliation payrolls happen automatically as a result of changes to the account, and on a quarterly basis (to correct potential tax discrepancies ahead of filing). Other times, they may be run by our support team, as needed, as a response to one of the situations below.

View your tax reconciliation debit(s) 

  1. Go to the Reports section.
  2. Scroll to find the “Tax Reconciliation History” report and click View
  3. Under the “Actions” column, click View details next to the tax reconciliation payroll you want to view.

To download the summary of a specific reconciliation, scroll to the bottom-right corner of the reconciliation details page and click Download

Cancel the debit for a tax reconciliation payroll

If you plan to make the tax payments associated with the tax reconciliation payroll outside of Gusto (directly to the agency), you can cancel the Gusto debit—this option is only available up until we've initiated the debit. To cancel the debit:

  1. Go to the Reports section.
  2. Scroll to find the "Tax Reconciliation History" report and click View
  3. Under the “Actions” column, click View details next to the tax reconciliation payroll you want to view.
  4. On the top-tight of the page, click Cancel debit.
    • By clicking “Yes, cancel debit”, you understand that you will be responsible for making these tax payments yourself by working with the relevant agencies. Any penalties, interest, over or underpayments, or notices will be your responsibility to resolve.
  5. Click Yes, cancel debit.

As a reminder, you'll only be able to cancel the entire debit—if you need to cancel specific parts of it, or the tax reconciliation looks wrong, contact us from the Help and Priority support section of your account to discuss options.

Tax reconciliation email(s) and next steps

Email notifications are sent when a tax reconciliation payroll results in a debit greater than $5.00. The debit typically occurs a few business days after you receive the email.

The email will notify you of the factors that impacted the tax reconciliation, the adjustment period, the last four digits of the bank account that will be debited, the debit date, any applicable taxes, and the total debit amount. 

In certain cases, you may receive an email about a refund from Gusto as well. We’ll also let you know if there is any action required on your end, like reimbursing employees for overpaid taxes.